I recently spoke to Dr. Chris Strickland, CEO of Lacima. Lacima has today announced a new product line in Lacima Trader and he was keen to update us with regard to that launch. Lacima’s main product has been Lacima Analytics, which provides comprehensive functionality for risk management, valuation and optimisation in a single, modular application for global energy markets. Lacima Analytics has had good uptake across the industry and it bolsters the RM in ETRM, an area of weakness in many ETRM applications. However, Chris was keen to target the trader and pre-trade side of things with a similar suite of robust analytical tools; hence Lacima Trader.
As Chris pointed out, very often the spreadsheets, homegrown and third-party tools used in trading to structure and value deals provide different results to the risk department’s post-trade tools causing a headache for all involved. Discrepancies have to be explained. Lacima Trader tools use the same sophisticated numerical engines that Lacima analytics does providing consistency between trading and risk. Chris pointed out that the tools, which initially include Simulation, Curve, Pricer and Storage, offer very rapid set-up, within one-day, and are easy to learn with a very familiar Excel interface. Several new products are already being worked on and will be introduced later, he told us.
For Lacima, the introduction of Lacima Trader represents a bit of a shift in terms of target market. The trader tools market is potentially very large but that requires affordable, rapidly installed and easy to use tools. Traders are not the most patient people on the planet and so the Excel interface will be helpful in that all traders know Excel very well. It will also expose Lacima to new competitors. However, Lacima has a reputation as providing really very detailed, rigorous and sophisticated risk tools that will help it to compete very effectively.
As stated in the press announcement, “I am incredibly excited to finally bring our vision of a wholistic numerical approach to trading and risk management to the market. For a number of years now we have watched market participants struggle with the analytics mismatch that occurs between “structuring the deal” and “managing the deal” and the resultant conflicts between front office and risk management teams driven to a large extent simply because of the different sets of analytics used.” noted Dr Chris Strickland, CEO Lacima. “As the leading energy risk analytics provider for the past five years in the Energy Risk Software Rankings, it made a lot of sense for us to be first movers to deliver this consistent approach.”